WASHINGTON A bill introduced in the House this morning would provide a variety of regulatory measures for credit unions, but does not address the long-sought member business loan cap increase or the bid for supplementary capital.
The legislation’s centerpiece is a risk-based capital proposal that revives concepts supported by the credit union industry in previous legislative efforts, such as the “Credit Union Regulatory Improvements Act.”
The measure, introduced by Rep. Gary Miller, R-Calif, would:
* allow NCUA to grant federal credit unions a waiver to follow a state rule instead of a federal one in certain situations--a reverse wild card provision;
- authorize NCUA to step in where appropriate to modify a Consumer Financial Protection Bureau rule affecting credit unions;
- establish a risk-based capital system for credit unions;
- require that NCUA and the CFPB revisit cost/benefit analyses of rules after three years so they have a true sense of the compliance costs for credit unions related to the benefit of the rule to consumers;
- require NCUA to conduct a study of the Central Liquidity Facility and make legislative recommendations for its modernization;
- give credit unions better control over their investment decisions and portfolio risk;
- provide credit unions parity with FDIC-insured institutions when it comes to deposit insurance coverage on Interest on Lawyers Trust Accounts (IOLTAs).
“This bill represents a way forward on risk-based capital that we believe can get Congressional support,” said Dan Berger, chief lobbyist for NAFCU. "We look forward to working with Vice Chairman Miller and his Financial Services Committee colleagues to get this important piece of legislation considered before Congress."
“Credit unions and community banks should not be burdened by an overwhelming amount of regulation better suited for more complex institutions. Instead of focusing on access to credit and other basic financial services, our local credit unions and community banks now have thousands of pages of rules they must comply with from the Consumer Financial Protection Bureau alone,” said Rep. Miller, who also sponsored a reg relief bill for banks. “This mounting regulatory burden hits credit unions and community banks particularly hard as they often lack the resources and personnel that larger financial institutions enjoy.”
“In my capacity as Vice Chairman of the House Financial Services Committee,” Rep. Miller continued, “I look forward to working with my colleagues to ensure that the regulatory environment for our nation’s credit unions and community banks promotes safe and sound banking practices without stifling innovation and consumer choice.”
Miller's bill will probably be combined later on with the regulatory relief measures being drafted for banks.
